In the close in Portland, OR Apartment Market, 3 bedroom units have a significantly higher vacancy factor than two or one bedroom units. In recent market statistics from CoStar for the north and northeast Portland Apartment Market, for properties 2 to 10 units in size, vacancy for 3 bedroom units was over 10%, as compared to two bedroom at just under 8%. Contrasting that, one bedrooms are just under 4% vacancy, with studios just under 3%. This was based on a survey of 691 multifamily properties in the close in north and north east part of the City.
While there has always been a spread in vacancy by number of bedrooms (more bedrooms, higher vacancy historically), the spread for three bedrooms increased noticeably around the end of 2011 to the beginning of 2012 over all the other size categories (2 bedrooms, one bedrooms, and studios). This seems to be particularly true the closer into the Portland Downtown Core that you get.
This correlates with a report from Todd Clarke, CCIM with New Mexico Apartment Advisors about the millennial generation and housing. In the report, millennials tend to want to live alone, as close to the urban core as they can get, and appreciate the forced simplicity of living in smaller spaces, and they prefer to rent rather than own. The want to own fewer “things”, and have more experiences of life. As the millennial generation (age 19-37) is actually larger than the baby boomers, they will have a major effect on all types of real estate demand in this country going forward. As a result some multifamily developers are starting to drop or severely reduce 3 bedroom apartments from their unit mix.